Correlation Between Zilliqa and MET

Can any of the company-specific risk be diversified away by investing in both Zilliqa and MET at the same time? Although using a correlation coefficient on its own may not help to predict future stock returns, this module helps to understand the diversifiable risk of combining Zilliqa and MET into the same portfolio, which is an essential part of the fundamental portfolio management process.

By analyzing existing cross correlation between Zilliqa and MET, you can compare the effects of market volatilities on Zilliqa and MET and check how they will diversify away market risk if combined in the same portfolio for a given time horizon. You can also utilize pair trading strategies of matching a long position in Zilliqa with a short position of MET. Check out your portfolio center. Please also check ongoing floating volatility patterns of Zilliqa and MET.

Diversification Opportunities for Zilliqa and MET

0.58

Correlation Coefficient

Zilliqa  MET

Very weak diversification

The 3 months correlation between Zilliqa and MET is 0.58. Overlapping area represents the amount of risk that can be diversified away by holding Zilliqa and MET in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on MET and Zilliqa is a relative statistical measure of the degree to which these equity instruments tend to move together. The correlation coefficient measures the extent to which returns on Zilliqa are associated (or correlated) with MET. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of MET has no effect on the direction of Zilliqa i.e., Zilliqa and MET go up and down completely randomly.

Pair Corralation between Zilliqa and MET

Assuming the 90 days trading horizon Zilliqa is expected to generate 0.84 times more return on investment than MET. However, Zilliqa is 1.19 times less risky than MET. It trades about 0.25 of its potential returns per unit of risk. MET is currently generating about 0.12 per unit of risk. If you would invest  1.31  in Zilliqa on September 2, 2024 and sell it today you would earn a total of  1.33  from holding Zilliqa or generate 101.53% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Weak
Accuracy	100.0%
Values	Daily Returns

Zilliqa  vs.  MET

Zilliqa

Risk-Adjusted Performance

19 of 100

Solid

Compared to the overall equity markets, risk-adjusted returns on investments in Zilliqa are ranked lower than 19 (%) of all global equities and portfolios over the last 90 days. In spite of rather unsteady essential indicators, Zilliqa exhibited solid returns over the last few months and may actually be approaching a breakup point.

MET

Risk-Adjusted Performance

9 of 100

OK

Compared to the overall equity markets, risk-adjusted returns on investments in MET are ranked lower than 9 (%) of all global equities and portfolios over the last 90 days. In spite of rather unsteady basic indicators, MET exhibited solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with Zilliqa and MET

The main advantage of trading using opposite Zilliqa and MET positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Zilliqa position performs unexpectedly, MET can make up some of the losses. Pair trading also minimizes risk from directional movements in the market. For example, if an entire industry or sector drops because of unexpected headlines, the short position in MET will offset losses from the drop in MET's long position.

The idea behind Zilliqa and MET pairs trading is to make the combined position market-neutral, meaning the overall market's direction will not affect its win or loss (or potential downside or upside). This can be achieved by designing a pairs trade with two highly correlated stocks or equities that operate in a similar space or sector, making it possible to obtain profits through simple and relatively low-risk investment.

Check out your portfolio center.

Note that this page's information should be used as a complementary analysis to find the right mix of equity instruments to add to your existing portfolios or create a brand new portfolio. You can also try the Portfolio Volatility module to check portfolio volatility and analyze historical return density to properly model market risk.